The Federal Highway Administration announced Sep. 11 that it did not approve an application from the Pennsylvania Department of Transportation and Pennsylvania Turnpike Commission to place tolls on I-80. The agency said the planned use of toll revenues does not meet federal requirements as there is no basis to conclude that the proposed lease payments are legitimate operating costs.
“Tolling interstates is a viable option for many states to fund highway improvements or to improve performance conditions,” Highway Administrator Tom Madison said. “Because we are legally bound to ensure applications for this program meet all congressionally mandated requirements, however, we are regrettably unable to approve this application.”
The revised application seeking tolling authority under the Interstate System Reconstruction and Rehabilitation Pilot Program was submitted to the Federal Highway Administration on July 22, 2008. Under the proposal, PennDOT would transfer I-80 to the Turnpike Commission and make payments.
The Federal Highway Administration said the Commonwealth’s application did not meet legal requirements for the correct use of toll revenue. Specifically, the application called for the Turnpike Commission to use toll revenue to pay annual lease payments to PennDOT. The federal agency noted that while under the program toll revenue can be used for lease payments, the amount of the payment is required to be based on an objective market valuation.
The Commission’s application, however, included no information or data justifying the proposed amount for the annual toll payment or establishing that the level was based on an objective market valuation. The agency noted that earlier this year it had asked for just such justification as it reviewed the tolling application. The Commission, however, sent no additional information supporting the lease payment level, the agency said.
“There is simply no evidence that the lease payments are related to the actual costs of acquiring an interest in the facility,” explained Administrator Madison. “Although we are unable to move the application forward, we stand ready to assist the Commonwealth in finding creative ways to address its transportation needs.”
Turnpike CEO Joe Brimmeier made the following statements upon hearing news of the FHWA's stance:
"The Turnpike Commission is unable to comment until we are officially notified by the Federal Highway Administration of the reasons for their decision. Up until now, we've only been made aware of this story by media reports. It is important to keep in mind that the Turnpike will continue to meet our financial obligations under Act 44. We provided $750 million to the commonwealth last fiscal year, are providing $850 million this year, and plan to meet the FY2010 commitment to make payments totaling $900 million to PennDOT for roads, bridges and public transportation agencies across Pennsylvania. After we've had an opportunity to see and understand the FHWA's rationale, we certainly will have more to say on this important issue."
